Wrapping up the year: Employment law essentials for employers

November 25, 2024

The holiday period is fast approaching, with some employees and businesses counting down to an office shutdown, and other businesses preparing for their busiest time of the year.

Either way, it is a good time for employers to be aware of employment law issues which can arise at this time of year.

1. End of year functions

End of year functions are a time to celebrate the achievements of the year gone by and for employees to connect in a relaxed setting.

These events often involve the service of alcohol, creating a lively atmosphere where employees can relax and enjoy themselves. However, these factors can also pose serious legal risks for employers.

Despite often taking place outside of the workplace, end of year functions will generally still be considered 'work' due to their connection to the workplace.

Whether it be recklessly setting coworkers on fire, pushing them into pools, or knocking them into boat propellers, cases demonstrate how quickly a fun gathering can turn into a serious risk for both employees and employers:

• In Brown v Aristocrat Technologies Australia Pty Ltd [2005] AIRC 656, an employee urinated over the side of a restaurant balcony on to diners below at his employer's Christmas party. Unsurprisingly, the employee was dismissed. Surprisingly, the employee brought an unfair dismissal claim, which was dismissed. Importantly the employer protected itself by communicating with employees and union delegates about its expectations as to responsible drinking and behaviour at the party, and repeatedly reminding them that workplace policies would apply at the event.
• In Vai v ALDI Stores [2018] FWC 4118, an employee was dismissed after he threw a glass full of beer at a security guard at a Christmas event, with the glass flying over the heads of his coworkers and into a wall where it shattered. The employee unsuccessfully argued his employer had to take some responsibility for his misconduct because it had freely supplied alcohol at the event. Helpfully for the employer, one of its managers suggested that he stop drinking before the incident occurred.

Employers need to be proactive at this time of year, taking reasonable steps to prevent misconduct or risks to health and safety - as is demonstrated by the above cases. The importance of acting proactively has become even more pronounced due to the new positive duties placed on employers to prevent sexual harassment, sex discrimination and hostile workplace environments.

If you are holding an end of year function, ask yourself:

• Do you have workplace policies dealing with appropriate and unacceptable workplace behaviour, and are employees educated in relation to such policies?
• Will there be communications in relation to expectations around staff behaviour at the event, including in relation to alcohol consumption?
• Is there a nominated person who will be responsible for ensuring the above is observed during the function?
• Will you be serving alcohol responsibly, including by offering food and non-alcoholic drinks to employees?
• Do you have a plan to assist employees in getting home safely after the event, particularly where they have been drinking?

2. Directing employees to take leave during shutdown periods

Many businesses require employees to use annual leave during the holiday period because of annual office shutdowns.

Subject to providing sufficient written notice (often 28 days), employers can generally direct employees to take accrued annual leave during such periods.

However, what if an employee does not have enough annual leave accrued to cover the shutdown period?

The Fair Work Commission has held that there is no power under the Fair Work Act 2009 (Cth) (FW Act) to include a provision in modern awards by which an employer may require an employee to take leave without pay during a shut down period. This decision resulted in modern awards being amended such that leave without pay during the shutdown must be by agreement.

Employers should ensure they comply with any relevant modern award obligations, such as giving sufficient notice and obtaining an agreement for unpaid leave during any shutdown.

3. Directing employees to work on public holidays

Many businesses operate over the holiday period, including on public holidays.

Under the FW Act an employee has a right to be absent from work on a public holiday (without loss of pay). However, an employer also has a right to request an employee to work on a public holiday if the request is reasonable. An employee may refuse to work if the request is not reasonable, or their refusal is reasonable.

For many years, employers have been setting rosters which include work on public holidays, whereby employers often considered that this practice could constitute a "request" to work a public holiday.

It has now been clarified, in CFMEU v OS MCAP Pty Ltd [2023] FCAFC 51, that employers do not have such a right to direct staff - they only have a power to request that staff work on public holidays.

Whether a request to work on a public holiday, or a refusal to do so, is reasonable will turn on consideration of various factors including the nature of the workplace, the employee's role, their personal circumstances, any overtime rates that they will receive as compensation, and the amount of notice provided.

Employers must ensure they first request an employee to work a public holiday and, if they refuse, then consider whether such a refusal is unreasonable.

4. Considerations related to casual employees

Many employers take on additional casual staff over the holiday period. These employers should be aware of new laws impacting casual employees which commenced on 26 August 2024. These changes include:

• A new definition of casual employee under the FW Act, which includes consideration of the real substance, practical reality and true nature of the relationship.
• An "employee choice" pathway, whereby casual employees can request to convert their employment to permanent employment. This replaces the previous casual conversion arrangement, whereby the employer had obligations to offer casual conversion (noting there are still transitional provisions in relation to the old casual conversion process).
• A new Casual Employment Information Statement, which must be provided to employees before, or as soon as practicable after, employment commences. Additionally, the statement generally needs to be provided after 6 and 12 months of employment and then every 12 months of employment after that (noting small businesses only need to provide the statement after 12 months of employment).

By taking necessary precautions and being aware of their responsibilities, employers can ensure that the only memories from the office holiday party are those of off-key carols and laughter, rather than the costly consequences of legal disputes.